Intel’s data centre business slows

snail-8296a552f7bd1064368205306ff8a3c7c7bdc7c4-s900-c85 Chipzilla produced a better than expected quarterly profit, however analysts are a bit worried about a slower than normal revenue growth for its data centre business.

If the outfit’s cunning plan to be less dependent on PCs succeeds then data centres should be front and centre but it seems that Chipzilla’s data centre business is shrinking.

It seems that there was generally weak demand from enterprises, causing revenue at the highly-profitable unit to rise five percent to $4 billion. Part of the problem was that Chipzilla did so well inthe  last quarter and increased business in this area by nine percent and this makes its growth this quarter look a bit sad.

Intel’s finance chief Stacy Smith said that as Intel enters the second half, he expect the enterprise segment of the business to stabilise and the cloud segment growth rate to accelerate.

Intel has been focusing on the unit and its operation that makes chips for internet-connected devices, as it seeks to lower dependence on the slowing PC market that it once helped create.

Sales from the Santa Clara, California-based chipmaker’s traditional PC business, which also includes chips for mobile phones and tablets, fell three percent to $7.3 billion in the second quarter ended July 2.

Global PC shipments fell less than expected in the quarter, helped by strength in the United States.

Over all Intel reported a better-than-expected profit as its cost-cutting begin to pay off. In April it announced plans to slash 12,000 jobs, or 11 percent of its global workforce, of which it said about half was already complete.

Intel’s forecast for $14.9 billion in current-quarter revenue topped the average analyst expectation of $14.63 billion.

Net income fell to $1.33 billion, or 27 cents per share, in the second quarter, from $2.71 billion a year earlier.

Profit for the quarter was hit by a one-time charge of $1.41 billion related to its cost-cutting drive.

Net revenue rose 2.6 percent to $13.53 billion, narrowly missing the average analyst estimate of $13.54 billion.